Daily Outlook - Downside seen on Greece and China Fears

By IBT Staff Reporter On 06/13/11 AT 12:37 AM

U.S. Dollar Trading (US) ended the week on the front foot after stocks markets notched up 6straight weeks of losses. Fresh selling was instigated by weak Chinese export numbers which cast a fresh cloud of concern about the health of the global economy. Dollar gains were across the board commodities also sold across the board. In US stocks,DJIA -172 points closing at 11951, S&P -18 points closing at 1270 and NASDAQ -41 points closing at 2643.

The Euro (EUR) heavy selling came through on the Euro after comments from ECB officials that a Greece credit event might stop the ECB accepting the bonds as collateral and have unforeseen spillover effects onto other smaller European countries. Overall the EUR/USD traded with a low of 1.4476 and a high of 1.4654 before closing the day around 1.4534 inthe New York session. Looking ahead, ECB President Speaks.

The Japanese Yen (JPY) was stable against the major with both safe havens finding support. EUR/JPY crashed lower to test Y115 before finding support and stabilizing. The weak Chinese data has darken investor sentiment towards the biggest economy in Asia. Overall the USD/JPY traded with a low of 79.95 and a high of 80.46 before closing the day around 80.30 inthe New York session.

The Sterling (GBP) was under pressure in the risk off climate but did well against the Euro with some rare gains against the single currency. EUR/GBP reversed from 0.8900 to fall back to lower 0.8800 level and could fall back further if the Greece fears spread to more European countries debt. Overall the GBP/USD traded with a low of 1.6217 and a high of 1.6382 before closing the day at 1.6231 in the New York session. Looking ahead, Bank Holiday.

The Australian Dollar (AUD) the Aussie came under heavy selling pressure on the back of being directly related to the weak Chinese news. Any mention that the Asia heavyweight would be cooling down hurts sentiment towards the commodity currency. Overall the AUD/USD traded with a low of 1.0524 and a high of 1.0652 before closing the day at 1.0550 in the New York session. Looking ahead, Bank Holiday.

Oil & Gold (XAU) Gold slumped the most in a month on heavy long liquidations. USD strength and failure to break above $1550 the main catalyst. Overall trading with a low of USD$1526 and high of USD $1545 before ending the New York session at USD$1531 an ounce. Oil was not immune to the big pull backs in other markets falling sharply through $100 a barrel. WTI Oil Closed -2.30 at $99.50 a barrel.

TECHNICAL COMMENTARY

Currency

Sup 2

Sup 1

Spot

Res 1

Res 2

EUR/USD

1.4308

1.4333

1.4335

1.4551

1.4653

USD/JPY

78.83

79.57

80.50

81.01

81.33

GBP/USD

1.6132

1.6173

1.6225

1.6384

1.6473

AUD/USD

1.0440

1.0510

1.0540

1.0726

1.0877

XAU/USD

1504.00

1524

1530

1553

1577

OIL/USD

95.00

98.00

98.80

100.00

103.00

Euro - 1.4335

Initial support at 1.4333 (50% retrace of 1.3970-1.4697) followed by 1.4308 (Jun 2 low). Initial resistance is now located at 1.4551 (Jun 10 high) followed by 1.4653 (Jun 9 high)

Yen - 80.50

Initial support is located at 79.57 (May 5 low) followed by 78.83 (Mar 18 low). Initial resistance is now at 81.01 (Jun 3 high) followed by 81.33 (Jun 2 high).

Pound - 1.6225

Initial support at 1.6173 (76.4% retrace of 1.6058-1.6547) followed by 1.6132 (May 25 low). Initial resistance is now at 1.6384 (Jun 10 high) followed by 1.6473 (Jun 7 high).

Australian Dollar - 1.0540

Initial support at 1.0510 (May 26 low) followed by the 1.0440 (May 25 low). Initial resistance is now at 1.0726 (Jun 8 high) followed by 1.0877 (76.4% retrace of 1.1012-1.0441).

Gold - 1543

Initial support at 1524 (Jun 2 low) followed by 1504 (May 23 low). Initial resistance is now at 1553 (June 6 high) followed by 1577 (All time high).

Oil - 98.80

Initial support at 98.00 (Intraday Support) followed by 95.00 (Intraday Support). Initial resistance is now at 100.00 (Intraday resistance) followed by 103.00 (Intraday Resistance).

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